tv Nightly Business Report PBS April 29, 2015 1:00am-1:31am PDT
this is "nightly business " with tyler mathisen and sue herera. miss tweets. shares of twitter plunged nearly 20% after earnings were leaked early on what else? twitter. battling back. hammering the global pharmaceutical and what they are doing to get back. and what the top money mathers expect from the federal reserve as they begin a two-day policy meet all of that and more for tuesd february 28th. i'm tyler mathisen s herera has the night off. call it a taste of a two-fleet tweet.
the twitter quarter earnings were released early on twitter. and the numbers stunk. revenue was far below forecast and the company slashed the outlook. the profit report was supposed to come after the close of trading today. but some key numbers were tweeted out early but a financial research firm that claimed it got them off of twitter's own investor relations website. the shares nose-dived and they were halted at the twitter request, they said to put out the full resort. the stock resumed trade, but at the close shares were down 18%. that is the twitter's second worst day ever. as for earnings twitter did beat expectations on that score at $0.07 a share but the critical revenue number a disappointed $436 million is what caught investors off guard. julia boorstin has more on what reports on what investors should watch. >> while the all important actor user number came in right in line with expectations, the nuz
moving the stock lower was guidance that came in lower than expected. the compan lowers the full year outlook from the top and bottom line. one issue was lower than expected performance from the direct reseg products. the weakness they are looking to address with the acquisition they announced with earnings is buying marktsing technology company telepart and announcing collusion with double click. we'll see if they can reverse the twitter's move to lower the outlook. back over to you. >> julia boorstin reporting. sticking with earnings not as much drama with ups. just a solid beat. a key indicator of u.s. economic health saying everything improved across the first quarter and that send shares higher by nearly 1.5%.
morgan brennan delivers a ups package. >> driven largely by higher prices and the first quarter of rate initiatives, including charging b size for all ground packages a strategy ups and fedex has deployed. >> it did drive up revenue but ultimately the goal is to help our customers shrink the package sizes down and to help us operate better and more efficiently. ups has enjoyed strong growth abroad with export activity jumped 9% in europe where they have a big presence but currency fluctuations and the euro against the dollar did weigh on revenue which missed analyst expectations. and cheaper oil prices add the pressure to the top line results as customer fur charges were adjusted lower. analysts say the biggest takeaway is the economy is doing okay here and in europe.
>> ups is certainly comfortable with the economy and the volumes to push price harder than in the past. >> ups reiterated the outlook in january when the 2015 guidelines were revised lower. they expect economic outgrowth to continue this year but despite falling 10% since the start of the year, the shares still look expensive. >> we're still hold rated on the stock s won't change much as far as what we're looking for for 2015, 2016 and 2016. >> and they announced a change in management. the chief kurt cune will retire and succeeded by the corporate controller and treasurer. that is expected t take place in july. for "nightly business report, breanan. it was a tailer of -- a tale of two drug components. merck and pfizer both reporting
results but digested differently. merck shares popping 5% and pfizer fell. bertha couples tells us the challenges both face and how merck came out on top today >> the strong dollar hammering the global pharmaceutical company but yet pfizer topped expectations and warning that the dollar will hurt sales for the year. >> the only thing they lowered their guidance on was by about $500 million wasn't that much was by currency. and we saw it with j and j and we saw it with lilly last week. >> and merck sales were impact but the second largest pharma giant's revenues were well above expectations helped by hedging and strong sales of the expect spi -- specialty drugs. >> it was mix related to the new drugs and when you think of hot airs whether acvp or oncology merck is participating in all of that. >> and investors were encouraged
after they reported positive results showing the diabetes drug jen you'via did not increase heart complications and that is good news for merck since an fda panel recommended that competing treatment compare warning labels for cardiac patients. for merck and drug makers a strong pipeline of new drugs, you some through acquisitions comes from years of declining sales through drugs and generic acquisition. we're seeing good old-fashioned innovation and new drugs which are improving the life of patients. >> for bristol meyer, you're voy and deneffo upset headwinds and for even pfizer new cancer treatments were strong. >> the i brands -- ibrance number came in at $38 million and that was only in -- that was in the very early stages. >> analysts say pharmaceutical companies are set to reap the benefits of cycle of drug introductions with a number of
specialty treatments in the pipeline. bertha coombs "nightly business repo new york. >> but will the new specialty treatments she just mentioned be affordable for everyone? personalized treatment for cancer and cys can cost tens and hundreds of thousands of dollars a year and in some cases they prolong life by just a few months. dr. peter balk is director of the kettering sloan center for outcomend joins us for insight. doctor welcome. good to have you with us. in a phrase or two, why do drugs cost so much in the united states and why do the prices keep rising as rapidly as they do apart from the break-through personalized drugs that we're seeing more and more of? >> well tyler, thank you for having me. i think what we see is very rapid rises in drug prices thatha seem largely disas from the benefits the drugs provide to patients. and it is important to realize
that many of these therapies are coming on the market and helping patients magnificently but irrespective of their major break through that's change the -- the trajectory of minor gains we're seeing rapid price increases. ten fold price increase in the last 20 years adjusting for cancer drugs, 100 holdover the last 50. that is much more than the increase in benefits we've seen. >> and why is that? >> we live in a place and environment where there is no downward pressure on drug prices. and the purchasers are completely separated from being able to either negotiate or leverage the benefits of the drug against the prices. we are price takers. we are price takers because that is what the pharmaceutical companies charge. an article today in the very controversial topic in "the new york times" in which you are quoted says that the president would like to see medicare be
able to negotiate the prices of drugs. this has been a political hot-button and pharma the main lobby is very strongly entrenchedn washington with congress. would that help keep the lid on price increases in a major way? >> tyler, i think you are right. this is primarily a political talking point. the ability to negotiate or not wouldn't skt prices that much. what is happening is most new products as if they are monopolies and if you require medicare or other insurers to include the drugs, the starting point of negotiation is the end of it. you have to have the drugs and you have to take the price the manufacturer charges. >> you have fought back personally as i understand it as my reading of your work indicates, about some of the cases where drug companies will come to you with what is described as an important new medicine but you don't see the value so you have fought against including them in your
therapies. is that true? >> well i don't like to call it fighting. >> like to call it using evidence to make good prescribing conditions and my hospital rejected an expensive cancer drug because we saw no benefit to it compared to an older drug and they were identically beneficial and used the same beneficial action and we rejected the higher price drug. >> are we spending in terms of therapies and obviously you and sloeb kettering, one of the great cancer hospitals in the world, are we expending excessivel on end of life care that may extend the time of life by a matter of months or the quality of life in increment, is that one of the issues here? >> i think there is a lot of issues but it begins with the prices of drugs. but it's common to say we spend a lot on end of life of care but people who are sick consume more
health care but i don't think that is the problem it is the unit prices we spend more on drugs that cost more here than any other developed nation and we have no ability or very limited ability to limit or set drugs that are similar in efficacy against one another in a normal market place would have. we need a system that keeps drug companies profitable and successful to promote innovation and drings drugs to market and keeps them affordable and doesn't break budget. right now we have the first affordable but breaking medicare with the specialty drugs and challenging the medicare budget as well. >> fascinating conversation. dr. balk thank you for being with uls. dr. peter balk with memorial sloan kettinger center with health policy and outcome. on to stocks now. get heing off to a volatile stock. the dow jones industrial average got off to a slow start due to a
siege. the blue chip dow index finished at 18,000110 and the nasdaq down and the s&p up 10. and home price increase increasing after the 10 months since february and the consumers wes confi than the economy in april. the dip to a four month low due to job market concerns. and confidence and housing, i should say, are two things the federal reserve watches very close sli and today the central bank policymakers began a period two-day meetings. a racin crease is highly unlikely when we get the results of the meeting tomorrow many of the nation's top money managers and investment strategists do expect changes down the road. steve liesman explains. >> as the fed begins the two-day meeting the market is looking for a better market that is
easier and starts later, and the reason is a stronger dollar and lower prices and lower outlook for inflation and weaker economic growth. and here is the time line. 38 market participants polleds first race hike in august of 2015, now seen in october. two months later for the start of rate hikes. the fed won't let the $4 trillion balance decline to april 2016 and now may 2016. how about when it will finally finish hiking rates. had been the fourth quarter of 2017 at 3%. now it is a quarter later at a lower rate of 2.85%. and the outlook for rates this year and next is also lower. if you look here. they lowered it for about 40 basis points for 2016 and about 20 for 2015. so looking for two hikes here. two quarter point likes here in 2015. looking at growth, it is remained steady despite the head
wins out there. still looking for 2.7% growth this year. fourth quarter over fourth quarter. and 2.8% next year. still not reaching the 3% growth we've been looking for here. the probability of recession remains low for this series of the survey. just a 15% chance or so that we'll have a recession in the next 12 months. what thins can -- things can go wrong? we asked about the risk to the u.s. economy. 28% say it is not here it is overseas. global economic weakness. 11% say it is here in the united states. tax and regulatory policies followed by geopolitical risks and finally a slow job growth and the last bit right over here slow wage growth. finally we asked participants to grade the current chair, janelle yellen versus ben bernanke over all, she does the same here on leadership. transparency a little bit better and communication a little bit better and a little bit better
along the way. this is a combination of people giving her a a. versus a c because they think policy is not right. she beats ben bernanke a little bit in the over all grade. for "nightly business report" i'm steve liesman. to the biggest oil companies in the country posting earnings this week and the results out of exxon and chevron will give investors a read on the health of the energy sector. we'll give you a look at what to expect jus demonstrations continued today in baltimore as the city recovers fm last night's violent unrest. t rowe price headquartersed there closed downtown offices today and said many employees will work from home or other
locations. legg mason encouraged their employees to work from home as well. southwest airlines have canceled ten depatures from the airport citing passenger safety. and major league baseball is taking a step. the baltimore orioles will play the first game in front of no fans tomorrow. and a weekend series will be moved to florida from baltimore. today's game was postponed and will be made up in late may. today the president condemned the violence in baltimore, calling it counter productive. the comments came during a joint news conference with shinzo abe at the white house. they are working to strengthen economic ties and trying to further a massive pacific rim trade deal. the politics around trade can be h in both our countries. it is never fun passing a trade bill in this town. >> japan recently surpassed
china as the united states' biggest creditor. to the supreme court where the justices heard arguments over the constitutionality over gay marriage and it could have implications over businesses large and small. hampton pierson reports. >> those demonstrators for and against gay marriage reflects the divisions and caution among the nine justices being asked to whether -- whether to require all 50 states to recognize same-sex marriage or let the state decide. some took the lead on the voice in redefining marriage. >> this definition has been with us for a millennia and it is very difficult for the court to say, oh, well we know better. fundamental core institution is the opposite sex relationship. >> same-sex marriages are
district in several states and the district of columbia. this case involved couples where they states are legal. >> we shouldn't have to leave our state where the same couples get the temperature in other states. >> we took this step for the protection of our country and we stand before you one step closer to being a legalized, recognized family in the state of michigan. >> there are an estimated 350,000 mayored same-sex -- married same-sex couples according to ucla. some couples have implemented benefit plans but how many more businesses will have to follow suit if the court rules in favor of gay marriages. so far the biggest economic headache has been -- you guessed if -- taxes. federal tax policy is uniform after the court's ruling two years ago.
the challenge now is what to do at the state level. >> the uncertainty is where it is still dd and in a state like alabama where the state courts are saying two different things it is tough for us to see taxpayers and citizens put in that kind of situation. >> based on today's arguments it looks like justice plan to set a high legal bar before possibly saying yes to the notion of same marriage -- same sex marriage. i'm hampton pierson at the u.s. supreme court. the market focus for two well-known companies. ibm and met life increasing dividends. ibm up 18% to $1.30 a share and met life hiked their dividend to 38 cents a share and both-year-olds around 3%. shares of ibm up 2% to $173.92 and met life closing at $50.86.
ford missed estimates on the top and bottom lines. the carmaker sold fewer vehicles in north america as they work to increase production of the f-150 truck. they mained the full year profit forecast and the shares rose to $16.06. it was tough for shares of coach. the clothing and accessory maker dropped 15% as they were hurt by a stronger dollar and increased competition from other retailers like michael coors and kate spade. the stock down 16% to 39.50i6 dollars. whirlpool fell lowering the profit and sale forecast for 2015 and said latin american sales will weigh because of brazil's stagnating economy. shares of whirl poll off 7% to $183.70. this earnings week for big oil. started this morning with results from bp which came in
better than experted and those rultds will be followed by the two american giants exxon-mobil and chevron. dominic chu has the report tonight. >> this week is key for investors interested in the energy sector. the two biggest oil companies in america are slated to report earnings. skexon mobile coming out thursday and chef rob is scheduled for friday. this could provide clarity for where industry leaders think we are headed. are feeling better for energy companies. >> i'm fairly optimistic for energy. when i look at earnings reports for total and bp i think you're going to see earnings slightly better and revenues coming in line with maybe a miss but that will carry the over all industry higher. >> but not everyone is as convinced that the all-clear signal has been sounded for bu energy stocks. oil prices could still drift lower and take the sector with
it. that is the danger. but some experts are pointing out that there may be an opportunity for longer-term investors. >> material price change since last june is going to effect them and i think it will be a challenge for a lot of companies in the energy space. but i do think that over time that is probably one of the biggest disconnect in energy values are, in the energy space due to the commodities price swing. >> there is no doubt they have rebounlded sharply in a short amount of time but can that move be sustained. skox and chevron could shed light on that part of the story. for "nightly business report," i'm dominic chu. still ahead, wall street gives with help from celebrity a-listers.
to watch tomorrow we're going to get the statement from the federal reserve after the central bank two-day meeting. first quarter gdp, the broadest measure of economic activity released tomorrow and that is what is on the agenda for wednesday. the national football league has decided to give up the tax exempt status in a letter today. the nfl commissioner informed team owners and members of congress said he was eliminating a distraction. the league was under pressure from lawmakers who questioned whether it deserved such a classification. as a result the league will no longer be required to disloez the compensation of the commissioner and other top executives. and finally, tonight a star-studded wall street trading floor. some famous named made their way to the financial services btig for the annual charity day.
answering phones an taking orders in the day's commissions donated to help worthy causes. bob miss anie was there. >> it was the 13th annual btig charity day. over 150 celebrities from a-rod to shaquille o'neal to eli manning to sports illustrated swimsuit cover model hannah davis. they descended on midtown manhattan for dozens of charities. >> mak a call make a trade here. the charity of my choice is [ inaudible ], quality of life fund is my mother's charity. since 1995 we spent about 150 [ inaudible ]. >> the founder steve sarker who just last week became the co-owner of the atlanta hawks has no problem getting his dozens of sports star friends to attend his annual event. >> the goal is to raise
$5 million today to get us well north of $30 million over 13 years and hopefully we'll hit $5 million. is the importance of people in the public eye to give back to the community. >> giants' quarterbackely manny was raising money for the march of dimes and other groups. he expressed the importance of being involved. >> once you did a little bit and visit a hospital and go to an event and see you get a difference you get a written note from a parent or a child comes up and you see them smile or maybe they've had a rough time and you understand that just a little can make a big difference in these people's lives. >> sports illustrated cover model hannah davis raising money for the happy hartz fnd to raise money for schools hit for catastrophe said people in the public eye should help others. >> i think it is schemely important because we have this platform whether an athlete, actress or model, people look up to you and people are listening
to you so i think it is important to do charitable work. >> the message here, the big money in business sports and entertainment comes with responsibilities. i'm hannah davis for "nightly business rep at the btig charity event. >> well done. that is "nightly businessr tonight. i'm tyler mathisen. hope to see you right back here tomo.
[ ♪music♪ ] >> the natural world is an amazing and endless source of inspiration for artists. >> roman loranc: i'm triggered by nature. there is something in the water that will help with my photography. >> li huayi: landscape painting which is the highest form of chinese painting. you release your energy in your heart. >> in respect of nature, this time on spark. [ ♪music♪ ] >> major funding for spark is provided by the william and flora hewlett foundation supporting creativity and innovation in the arts since 1967. and by the kqed campaign for the future program venture fund with additiona